Q 17 What refers to the cost of borrowing money or the amount earned by a unit principal per unittime?Select one:a. yield rateb. rate of returnc. economic analysis returnd. rate of interest

Solution Rate of Interest The rate of interest is that the quantity a lender charges for the use of…

Answered: What refers to the cost of borrowing…

What refers to the cost of borrowing money or the amount earned by a unit principal per unit time? Select one: O a. yield rate b. rate of return c. economic analysis return d. rate of interest

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17Q: What is the difference between the discount rate used for net present value and the internal rate of...

See similar textbooks

Related questions

Q: How do you calculate Fixed Asset Turnover? What is the Free Cash Flow Ratio? What is the difference…

A: The answers for the questions on accounting ratios are discussed hereunder : Fixed Assets turn over…

Q: Distinguish the nominal rate of return from the real rate of return.

Q: What is the bank's return on assets (ROA)? Write your answer as a percent rate.

A: Financial ratios are those which provide a summary of the accounts of a company and helps an…

Q: Which is the accounting rate of return using the average investment?

A: Summary of the relevant information as provided in the question : cost of investment = £…

Q: The before-tax and loan cash flows for an economic evaluation are expressed in constant dollars.…

A: The question is based on the concept of calculation of free cash flow after tax from a long term…

Q: How can we calculate the Times-Interest-Earned Ratio?

A: Times Interest Earned Ratio: It is one of the solvency ratios. It is a measure to evaluate the net…

Q: Create simple examples to illustrate the following concepts. i. Time value of money ii. Effective…

A: i) Time Value of Money: The concept of time value of money underlines that the value of money today…

Q: Define effective annual rate (EAR) with examples. Differentiate between annuity cash flows and mixed…

A: Nominal interest rate (annual interest rate) is the annual rate without effect of compounding.

Q: This method evaluates the return of an investment by dividing the annual average income by the…

A: By dividing the annual average income by the average investment, return on investment is calculated.…

Q: a. what is the difference between the discount rate used for net present value and the internal rate…

A: Discount rate used for net present value is rate which investor want to earn from a project . It is…

Q: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: Which statement is true? * General borrowings may earn investment income deductible against general…

A: Business may borrow funds for the purpose of business. These borrowings can be general borrowings or…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: Consider a series of cash flow for a loan financing depicted by a CFD given in Figure Q2(a). With…

A: The present value of the cash flows refers to the determination of the present worth of a fixed…

Q: Estimating liquidity needs involves: A. forecasting the level of future loan commitments and…

A: Liquidity is the need of funds

Q: Which are the two computational schemes for calculating this earned interest yield?

A: The two computational schemes for calculating the earned interest yield are compound interest scheme…

Q: What is the present worth for the investment represented by the given cash flow? Interest is 12%.

A: Present Worthbis the sum of present value of cash flows discounted at the required rate of return.

Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions? Please provide…

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…

Q: ,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary…

A: Eeffective yield or interest rate is a rate at which the amount invested actually grows over a…

Q: What can you calculate with the Excel argument FV? Number of periods of time for a loan or…

A: Future value is the value of the current assets or some amount that is invested today and the amount…

Q: What is the difference between-1 accounting and Finance? answer this ?question with suitable example…

A: The difference between accounting and finance is as follows:

Q: On what does the interest paid on a cash investment depend?

A: Cash investment An investment (short-term) under which one makes a deposit the cash and also…

Q: It is the fractional part of the capital or sum invested that is paid for the loan or investment.…

A: 1. The rate of interest is some predecided percentage that is charged on the loan amount or provided…

Q: When is the Times-Interest-Earned Ratio?

A: The TIE is a calculation of a firm's ability to reach its debt liability based on its current…

Q: The borrowing cost to be capitalized in general borrowing cost is the lower between the amount…

A: General borrowing cost refers to the borrowing cost like interest expense, finance charges on the…

Q: Compute for the following: 1. Accounting rate or return based on the average investment 2. Net…

A: The capital budgeting is a technique that helps to analyze the profitability of the project.

Q: How is the times-interest-earned ratio calculated, and what does it evaluate?

Q: Distinguish between the initial rate of interest and the expected yield on an ARM. What is the…

A: Introduction: The adjustable rate mortgage is one of the method used to calculate the interest rate…

Q: Calculate Times interestearned Return on Financial leverage Current Ratio

A: As posted multiple independent questions we are answering only first question kindly repost the…

Q: Select all of the time value of money factors that are known in a NPV assessment O Present value of…

A: npv : IT IS THE DIFFERENCE BETWEEN PRESENT VALUE OF CASH INFLOW AND PRESENT VALUE OF CASHOUTFLOW.

Q: What is the internal rate of return? How is it used? How does it relate to the concept of compound…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: What is the formula used in annuity due if your looking for the compounded interest rate with given…

A: Present Value of an Annuity is used when a business wants to know how much amount it should pay for…

Q: PRESENT VALUE FORMULA Please provide the formula for finding the Present Value of money and explain…

A: Definition: Time value of money: Time value of money refers to the concept that the value of money…

Q: a. Determine the interest rate if the money was compounded continuously. b. Determine the effective…

A: Effective annual rate (EAR) refers to a real interest rate which an investor is expect from his…

Q: Which of the following affects the present value of an investment? a. The type of investment…

Q: What four fundamental factors affect required rates of return(i.e., the cost of money)?

A: The minimum rate that is expected by an investor from the investment made in a project is referred…

Q: explain the concepts of compounding and discounting(Time Value of Money), and give practical…

A: The term compounding can be defined as future value of persent investment. Future value is an amount…

Q: Which figure of merit provides an interest rate at which the present value of the future cash flows…

A: IRR It is a rate at which the amount of investment equals to PV of the future CF. It is a…

Q: Which of the following affects the present value of an investment? The type of investment (annuity…

A: Present value of the investment: Present value of the investment is calculated using the cash flows…

Q: Explain the traditional model of money demand

A: Demand for money is required for Private Consumption. It results in Gross Domestic Product. GDP is…

Q: What does the Excel argument Nper refer to? Number of periods of time for a loan or investment.…

A: Nper is important argument in EXCEL while calculating present value or future value in financial…

Question

Q 17

What refers to the cost of borrowing money or the amount earned by a unit principal per unit
time?
Select one:
a. yield rate
b. rate of return
c. economic analysis return
d. rate of interest

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

What is the equation to calculate the accounting rate of return?
What is the difference between the discount rate used for net present value and the internal rate of return methods?
The discount rate used in a net present value analysis is the ________. A. rate of interest earned on a savings account B. rate of inflation C. rate of interest charged for debt financing of an investment D. required rate of return or the hurdle rate
Which of the following methods consider the time value of money? A. payback and accounting rate of return B. payback and internal rate of return C. internal rate of return and accounting rate of return D. internal rate of return and net present value
Define Times interest earned ratio.
Distinguish the nominal rate of return from the real rate of return.
The yield on a savings account is also referred to as Select one: of O A. liquidity. O B. compounding. zion O C. rate of return. O D. asset management. O E. insolvency.
How can we calculate the Times-Interest-Earned Ratio?
Which method does not consider the time value of money? Choose the correct. A. Net present value B. Internal Rate of Return C. Average rate of return D. Profitability Index
Which one of the following is most closely related to the net present value profile? A: Payback B: Discounted payback C: Profitability index D: Average accounting return E: Internal rate of return
What is the amount of tmes-Interest earned?
What is the Times-interest·earned ratio?